Millennials have had a lot of struggles when it comes to the housing market. Those from ages 22-37 fear the housing market, and rightfully so when you consider the time they came into adulthood. Millennials witnessed firsthand the subprime mortgage crisis displaying just how irresponsible bankers had been. So how do we get past this fear and help millennials enter the housing market?
The first thing millennials look for is transparency when it comes to the home buying process. According to a recent study by Even Financial. “While 60% of Millennials indicate that they would love nothing more than to trust their bank and share a partnership/friendship relationship, more than a third of those surveyed would describe their current bank as closer to a “used car salesman” or “aggressor” than a friend.” So, what should you do? Be open and honest with millennials, give them a full explanation of what is happening and what steps they need to take for home buying success.
Close the Generation Gap
Previous generations had a much different financial prospect than millennials today. The Economist points out that “When baby boomers hit a median age of 35 in 1990, they owned nearly one-third of American real estate by value. In 2019, the millennial generation, with a median age of 31, owned just 4 percent.” So why is that? Rising costs in home prices, medical costs, income inequality, and ever-present student loan debt means that millennials do not have as much to spare on investing as previous generations. To truly help millennials they don’t need somebody expecting them to follow the same path as their parents and grandparents. It is important to listen and gauge what goals they have otherwise, you’ll end up alienating those you are trying to aid.
Millennial homebuyers, while hesitant are not entirely opposed to home buying. In fact, according to a recent Realtor.com article millennials are expected to make up 50% of all new mortgages in 2020. So, what does it take to help a millennial enter the real estate market comfortably?
1. Make Them Feel Safe
While obviously nothing is guaranteed explaining how their money is safe in real estate can give them some peace of mind. By going over projected home values in an environment that is comfortable to them you are enabling them to feel more at ease with the process. Be able and willing to collaborate with them. By answering any questions, they have you are making them more comfortable with the home buying process
Be open and honest with them about what can be expected. Is there a reason this form needs to be filled out? Explain why you are doing things the way you are. Offer as many resources as possible so they can do their own research.
Go over what choices they have. Helping millennials weigh the pros and cons. Go over contracts clearly so they understand what choices are available to them. Let them know everything that is available to them. Explain why a fixed rate may be better for them than an adjustable-rate based on their personal situation and preferences.
Everybody wants to feel like they have made the best decision for themselves. And the easiest way to empower somebody is to give them knowledge. If you have done all the previous steps then you have most certainly done that. But it doesn’t end there. Give them tips and resources to help new homeowners. What you do after the sale is just as important as what you do before. Especially when word of mouth is so important in real estate.
Millennials have had it rough entering the housing market. We are now in a time where they are going to be more active than ever. 2020 is going to be a great time for millennials to buy a home. While the struggles preventing them are still there the market is changing just enough to help them make homeownership a reality.
I am passionate about Real Estate and eager to answer all of your real estate questions! Text or Call me at 360-880-2356 or email me directly to ask about Buying, Selling or Investing in today's Real Estate Market - serving Lewis County & Thurston County, WA.
Certified Residential Specialist | Real
Mountain Valley Real Estate